No Star Wars Battlefront & Disney Infinity Hit First Quarter Results

The Walt Disney Company today reported quarterly earnings for its first fiscal quarter ended December 31, 2016. As part of the full report, Disney shared some information on its Consumer Products and Interactive Media (Video Games).

Here is the official details:

Consumer Products & Interactive Media revenues for the quarter decreased 23% to $1.5 billion and segment operating income decreased 25% to $642 million. Lower operating income was due to decreases at our merchandise licensing, games and retail businesses. Lower results at our merchandise licensing business were due to higher revenue in the prior-year quarter from merchandise based on Star Wars and Frozen and an unfavorable impact from foreign currency translation, partially offset by higher minimum guarantee shortfall recognition.

The decrease at our games business was due to a decrease in licensing revenue from Star Wars: Battlefront, partially offset by a favorable impact from the discontinuation of our Infinity console game business in the second quarter of the prior fiscal year and higher minimum guarantee shortfall recognition.

Star Wars: Battlefront was released in the prior-year quarter, whereas there was no comparable title released in the current quarter. Lower operating income at our retail business was due to lower comparable store sales and online revenue, reflecting higher sales of Frozen and Star Wars merchandise in the prior-year quarter. This decrease was partially offset by sales of Moana merchandise in the current quarter.

Our Take:

With this winter quarter not getting any new video games, compared to 2015 getting both Disney Infinity 3.0 and Star Wars Battlefront, it was always going to be difficult to compare on the previous year. Throw in that Rogue One merchandise wasn’t as popular as the Force Awakens.